October 31, 2020

Dcoop takes a rabbit out of the hat to make fun of Trump | Economy

Dcoop takes a rabbit out of the hat to make fun of Trump | Economy



The Spanish olive sector felt like a slap in the face of imposition, last July, of a duty of 34.75% on the importation of black olives of table by the North American authorities. Immediately sales plummeted more than 40% in a business that in recent years had not stopped growing to 40,000 tons. As the months went by, the effects worsened until supposing a descent of 70%, which at the same time caused adjustments of personnel in several Andalusian companies, a reduction of the offer and prices to the loss in the field before the impossibility to give exit to the stock.

But the logic of the market has been against politics. The cooperative group Dcoop, a world leader in the production of table olives and a leader in the production and marketing of packaged olive oil and in bulk, has counterattacked by acquiring a share of the largest black olive producing company in the North American market. American Bell Center Foods. This was also one of the groups that had denounced Spanish imports. The cooperative from Málaga understood that, faced with the difficulty in defeating the enemy, it was best to join him. This will mean for Dcoop to send from Spain olive green, today free of these tariffs, for its transformation into blacks in that country and in this way to avoid taxes on black olives.

For this campaign, it expects to market more than 20,000 tons compared to the 5,000 that it sells today. Dcoop is one of the most important cooperatives in Spain, with sales of 1.08 billion euros thanks to oil, olive and livestock products, cereals, cheeses and wine, especially after the incorporation of the La Mancha Baco cooperative. It currently has more than 80,000 members, mainly in Andalusia, Extremadura and Castilla-La Mancha, with a production of 100,000 tons of olive and an average of 230,000 tons of oil. Despite this high volume of sales, Dcoop won only 3.7 million euros in 2017.

Your strategy is to gain volume. The president and general manager of the Malaga cooperative, Antonio Luque, believes that with these operations his sales will be multiplied by six to achieve in the coming years to provide 30,000 tons to the black olive market in the United States. In addition, it does not rule out the possibility of extending this commercial collaboration to other products, such as olive oil itself.

The cooperative has also intensified its expansion in other fronts, as it did with the purchase of 5% of the Portuguese firm Macarico, with a presence in more than 40 countries. But what Luque has always had clear is the commitment to the US, a market controlled by Italian brands. In 2015, it opted for the pacts route. In the case of oil, he bought a part of Pompeian, one of the most important local groups in this industry, owned by the Moroccan family Devico. With the agreement, basically with Spanish oil, but under the brands of that company, Pompeian came to have a market share of 14%, unseating, via more adjusted prices, the also Spanish Deoleo, which occupied that leadership to date mainly Spanish oil and mostly Italian brands such as Bertolli and Carapelli (Carbonell and Koipe, from Deoleo, are secondary in the US).

The olive war

The second important issue for Dcoop was the aforementioned war of tariffs. The North American table olive market rises to 90,000 tons of which Spain placed 45% as the main supplier. Faced with the Spanish offensive, two of the most important North American companies in the segment of the black olive, Bell Center Food and Musco Family Online, through the Coalition for the Trade of Mature Olives, promoted the need for apply tariffs on Spanish black olive imports for the damages it was causing to their interests.

Once the tariffs were introduced and sales plummeted, the Devico family and the Dcoop cooperative created a 50% instrumental company with which they acquired 20% of the shareholding of Bell Center Foods which, although it operates mainly in black table olives, also It has presence in the oil with a turnover of about 200 million euros. The operation contemplates the commitment to raise that participation to 50% in the short term. With this action, the new partners have the objective that Spain and North Africa, basically Morocco, become the only suppliers of the raw material, the green olive, for the North American group.

In the medium term, the possibility is contemplated that Acorsa, a Dcoop company created in 2003 in California with the aim of boosting sales of table olives in the US and Canada, will be integrated into the same group. Its development has been positive for the Spanish cooperative with sales of some 5,000 tons of olives for 20 million euros. But with the purchase of the stake in Bell Center, the company has seen that it can not be with two companies selling the same product in the same market.

Question of 'lobby'

The estimates of the president of Dcoop, Antonio Luque, in relation to the olive, coincide with what happened in the olive oil market. In the short term, it expects that the group's sales of Spanish table black olive may increase but, above all, of the 26 cooperative members whose activity, income and profitability are increasingly dependent on the evolution of foreign markets.

For Luque, this strategy is not going to be a flower of a day. The manager is not afraid that the North American authorities will respond by imposing equally new tariffs on the green olives. In his opinion, the promotion of tariff measures against black table olives was undertaken by the two largest companies in the sector, one of them today a partner and with the same interests. On the other hand, he understands that at this moment other groups in the same North American sector would not have the capacity to carry out another offensive against the black olive.

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